EU and German PMI, US Jobless Claims, Existing Home Sales

As the dollar again struggled against other major currencies, emerging market currencies like the South African rand (ZAR) and the Russian rouble (RUB) continued their recovery with the USD/ZAR pair trading for the first time in more than a month below 18, which the USD/RUB hit a new 10-week low.
As stock indices such as the US Tech 100 continued to push higher, closer to the previous all-time high seen in February and with the EIA announcing a noticeable draw from oil stockpiles over the past week, oil prices continued to recover. Precious metals on the other hand were unable to continue on the uptrend seen last week and were in the red by Thursday morning, with noticeable losses in silver and palladium prices.
After a positive sentiment on Wednesday, stock indices were again facing some resistance by Thursday morning ahead of the release of the German and European PMI figures.
On Thursday weekly new initial jobless claims for the US will be reported, as well as Leading Indicators, existing home sales and the Federal Reserve’s weekly statistics. Later in the Asian-Pacific trading session CPI data from Japan for April can be expected.

EUR/USD

The euro tested for the first time in three weeks the resistance level around 1.10 in the EUR/USD pair, given the overall weakness of the greenback. The dollar weakness can be as usual attributed to a multitude of factors. Analysts see the actions and statements of the central bank and lawmakers as a key argument for the weakness of the currency with the Chairman of the Federal Reserve giving multiple interviews and other statements in the past week, indicating that his central bank can do more to help the economy following the havoc caused by the pandemic. While the Fed ruled out negative interest rates for now, investors are still unsure if the central bank will not be forced to follow in the footsteps of the Japanese and Europeans on this subject.
The euro on the other hand could have been supported by recovery fund proposed by the leaders of Germany and France. As the fund would serve especially countries which as highly impacted by the pandemic such as Italy and Spain, the yields of their respective sovereign bonds drastically declined on the announcement.
On Thursday manufacturing and services PMI numbers will be released for Germany and the EU.

Europe 50

With the positive overall market sentiment in other regions like Asia and North America, the Europe 50 managed to recover the losses from the previous day and close at the highest level so far for this month.
While the number of daily new cases of coronavirus infections around the world is increasing at an unprecedented pace, the stabilization of the situation in Europe is allowing more and more countries to scrap restrictions in place or at least plan for the near-term future. Spain was reported to be turning tourists away for the time being, while Italy already announced to open international borders by June 3, while Greece announce June 15 as their date to reopen for the tourism industry.
After the French and Dutch governments decided to support their struggling flag carrier AirFrance KLM weeks ago with billions of euro during these difficult times, reports indicate that the German flag carrier Lufthansa finally was also to secure government support with a total of 9 billion euro.
European consumer confidence as surveyed by the European Commission improved in April from -22 to -18.8.

WTI Oil

Oil prices were up again, trading at a new two-months high, after data from the American Petroleum Institute (API) indicated a that over the past week for the first time since the coronavirus pandemic shutdowns oil stockpiles declined. This was confirmed by figures released by the Energy Information Administration (EIA) which indicated a draw of 5 million barrels compared to the past week. On the other hand gasoline and distillate stockpiles were up.
Some analysts see even a deficit coming again to the oil markets as soon as June, which could be also influence the decision of the countries part to the OPEC+ deal whether to extend the production cuts beyond June or to ramp up production levels as the world economy might start to recover.
On Friday the US Baker Hughes Oil Rig Count will be published. The numbers released last week at just 258 operating oil rigs was the lowest since the global financial crisis in 2009.

US 500

Major stock market indices like the US 500 closed with a noticeable upside on Wednesday, recovering practically all loses from the previous trading day.
In a somewhat mixed sentiment in the market, US social media companies like Twitter (+8.00%), Facebook (5.97%) and Snapchat (+4.29%) managed to outperform the overall index performance, while for Spotify (+8.84%) the rally also continued as investors are re-evaluating the company’s value after it signed a deal for podcasts with the known podcast host Joe Rogan, which is valued at A number of significant data releases are scheduled for Thursday, including the weekly new jobless claims statistic, with analysts hoping that the number will further decrease to below 2.5 million after last week only marginally less than 3 million new claims were reported. Also on Thursday the results of the Philadelphia Fed General Business Conditions survey will be published. After reaching -56.6 in the past month, expectations are that business conditions could slowly start to improve, given the gradual lifting of lockdowns across practically all 50 states.

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